The story has been updated with comments from Danaher's second-quarter earnings conference call.
NEW YORK (GenomeWeb News) – Danaher today reported a 4 percent year-over-year increase in revenues for the second quarter, while Life Sciences and Diagnostics revenues rose nearly 6 percent.
For the three months ended June 28, the Washington, DC-based conglomerate pulled in total revenues of $4.74 billion, up from $4.55 billion, topping the consensus Wall Street estimate of $4.72 billion.
Core revenues companywide were up more than 2 percent while acquisitions added another 2 percent to growth. Currency translation reduced revenues by a fraction of 1 percent.
Revenues from Danaher's Life Sciences and Diagnostics segment, the largest of the company's five segments, increased to $1.67 billion from $1.58 billion, according to its Form 10-Q filed with the US Securities and Exchange Commission.
Danaher attributed the increase to demand in the clinical, acute care, and pathology diagnostic businesses. It noted in its SEC document "strong sales" of consumables and automation hardware in the clinical diagnostics business in high-growth markets, offsetting softness in North America and Europe. Acute care diagnostic growth was fueled by continuing strong global consumables sales associated with the firm's installed instrument base and demand for compact blood gas analyzers.
Pathology diagnostics growth resulted from demand for advanced staining systems and consumables in North America and China, as well as sequential improvements in Europe as Danaher moves to a direct sales model there from a distribution model.
On a conference call following the release of the earnings results, Danaher President and CEO Lawrence Culp said that the Beckman Coulter business was up in the mid-single digits, with growth across all major product categories. He added that R&D spending in that business had doubled as Danaher "continues to ramp up our product development efforts."
Last month, the US Food and Drug Administrative cleared Beckman Coulter's Access AccuTnl+3 troponin l assay for use on the company's Access 2 immunoassay system, allowing the company to offer a troponin assay to new customers in the US for the first time since 2010, Culp said.
AB Sciex, which houses Danaher's mass spectrometry business was up in the mid-single digits year over year, as growth in the applied and clinical research markets, as well as pharmaceutical market, offset a reduction in sales in the academic research space.
For the second quarter, Danaher's profit was up to $616.8 million, or $.87 per share, compared to $600.2 million, or $.84 per share, a year ago. On a non-GAAP basis, EPS from continuing operations was also $.87 per share, inching past analyst estimates of $.86.
The firm's R&D costs increased 10 percent to $312.2 million from $283.6 million in the second quarter of 2012, while SG&A spending rose 5 percent to $1.34 billion from $1.28 billion.
Among Danaher's other segments, Test and Measurement revenues retreated to $855.0 million from $856.4 million; Environmental jumped to $826.8 million from $763.9 million; Dental was up to $514.7 from $498.8 million; and Industrial Technologies increased to $866.7 from $851.0 million.
The company ended the quarter with $2.32 billion in cash and cash equivalents. Culp said that Danaher had about $8 billion available for M&A through 2014. He did not lay out the company's M&A strategy but said that "we're encouraged and fundamentally optimistic about our ability" to pursue deals as they appear.
Valuations are up, so "we can't buy every company that we want to buy, but that's never our ammo. We're looking for great fits where we can add value, where we can generate a return for our shareholders." Danaher, he added, is "having high quality conversations with high quality companies."
For the third quarter, Danaher is forecasting adjusted EPS of between $.78 and $.83. It narrowed its full-year 2013 EPS guidance to a range of $3.37 to $3.42 from a previous range of $3.32 to 3.47.
In a statement, Culp said that core revenue growth in Q2 exceeded expectations.
"As we look to the second half of the year, we maintain a conservative macro outlook, while remaining confident in our ability to deliver solid operating margin expansion," he said. "Our earnings outperformance in the second quarter allows us to make additional high impact growth investments and to fund productivity and efficiency initiatives that we believe will position us well for the balance of 2013 and beyond."
In Thursday morning trading on the New York Stock Exchange, shares of Danaher were down 1 percent at $67.54.